Your 50% will be private as you live in the house.

Your ex's 50% can be rented out. The tax treatment for them is pretty much the same as if the whole house was rented, they claim 50% of expenses etc.

Your intention and actual use of the property also comes into account in determining whether or not you can claim GST.

If you do a substantial reno which results in a 'new building' (as determined by the ATO) and you originally intend to, and in fact do, sell the property within 5 years you can claim GST. You also have to pay 1/11th of the sale price as GST.

If you do a substantial reno which results in a 'new building' (as determined by the ATO) and you intend to rent the property and in fact do rent the property you don't claim GST. If you were to sell the property within 5yrs you will still have to pay some GST on the sale.

Things get even more complex if you intend to sell but later down the track you decide to rent.

Two key things you need to be across if you are doing a reno regarding GST;

• will the reno result in a 'new building' in the eyes of the ATO
• what is my intention once the reno is complete, rent or sell (document this in case of ATO audit or your intention changes i.e. you reno'd to sell but the market was terrible when you finally completed the reno)

I agree with PLC, reno sounds like a capital improvement, tax deductions over time via depreciation/capital works deductions.

Can move in and do the reno, then move out and rent out.

• Reno costs are capitalised into the cost base of the property for CGT purposes
• Property will be eligible to be claimed as your PPOR for up to six years after you move out (though remember you can only have one PPOR at any point in time)
• Once the property is rented get a quantity surveyor to assess the construction cost of the buildings etc (this will capture the reno costs) and start claiming depreciation/capital works deductions (capital works deductions reduce your CGT cost base)

If you rent the property out first, then move in and reno, CGT will apply on the value increase from the time purchased to the time you move in and claim PPOR exemption.

Also this is your first home! You don't want to miss out on the FHOGs which you might if you don't move in straight away.

"I swear, the car was dusty, I just needed to drive it to the car wash. The only car wash I trust with my car just happens to be along the Great Ocean Road…"

Agree here, you want the agent to be friendly. When I make an offer that is significantly below asking price I make sure I explain why the offer is so low. Being reasonable in a negotiation rather than just  trying to rip off the vendor.

For example, my partner and I recently purchased a modest block of land in a regional town. Our offer was $30k, $10k below the asking of $40k (25% discount).

Explaining the offer;

• this is the most we can afford to pay for the land, when building a house to rent out profitably
• we purchased similar land near by last year for a similar price
• we had a bank valuation for a refinance on the similar land (with completed build) that came in quite low
• it has been on the market for a long time and we can settle in 60 days
• there is other land we can buy and other offers we have made

That being said, don't be too afraid that'll you'll piss off the agent. Negotiation can be uncomfortable but $10k is a high price to pay for a warm fuzzy feeling

Hi Propertyinvesting.com'ers,

This thread has peaked my interest, and I was wondering what method everyone uses to track their investment income & expenses?

I've knocked up a quick 6 question survey,  if you can give me 3 min of your time I'll post the results up here. Should be interesting.

http://www.surveymonkey.com/s/F3FYPTK

Cheers

$100k p.a.? Not bad work if you can get it.

Maybe Steve can add that to his list of  "income accelerators"?

propertyinvesting.com/dating-for-profit ?

5 Bedrooms likely to be rented to 5 tenants (students)?

Hard to find finance for student accommodation?

Is there better cheaper student accommodation coming online soon?

A financial advisor might be overkill. You might also struggle to find someone to do this quickly and cost effectively.

The majority of financial advisors are more interested in selling financial products in my experience.

Your mortgage broker should be able to help work out changes in repayments for changes in interest rates or if you're IO just times your loan amount by the change in interest rate to work out your additional repayments per annum.

You can use comparisons from realestate.com, real estate agents, bank valuations etc. A good property manager might be able to help you consider all the rental outgoings and you can get quotes for insurance etc fairly easily.

If you are using a spread sheet or other program to crunch the numbers it might be worth getting someone else to cast their eye over it all (mortgage broker, accountant, experienced investor or the like) Changing the inputs and analysing the outcomes is a good way to start as well.

"How can I prove to them that this is a safe method of investing and there is minimal risk involved with the right deal being purchased?"

Investing is always risky, that is why we generate a return. Key is to manage the risks. Try documenting all the risks associated with your deal. Try to access the financial impact of these risks, the likelihood of the risks actually occurring and how you might mitigate the impact of these risks should they occur.

i.e. what happens if;

Interest rates go up? How likely is it that interest rates go up by 1%? What is the dollar impact on your repayments? How can cover the additional repayments? How high can rates go before you are in trouble?

House prices fall?

You lose your job?

You cannot find a tenant?

You under cost your deal and have unexpected costs?

etc…

Don't let the risks scare you or your investors off, have a plan to assess and manage the risks.

Example:

Identified risk – Cannot locate a tenant

Likelihood – Low, vacancy rates in area = 1-2%

Financial impact – $230 p/w whilst untenanted

Mitigation strategy 1 – a use a property manager, who can help find good tenants

Mitigation strategy 2 – lower rent, we can afford to go to $255 p/w

Good luck